Visualized: A Global Risk Assessment of 2021 And Beyond
Risk is all around us. After the events of 2020, it’s not surprising that the level and variety of risks we face have become more pronounced than ever.
Every year, the World Economic Forum analyzes the top risks in the world in its Global Risks Report. Risks were identified based on 800+ responses of surveyed leaders across various levels of expertise, organizations, and regional distribution.
Which risks are top of mind in 2021?
The World’s Top Risks by Likelihood and Impact
According to WEF’s risk assessment methodology, all the global risks in 2021 fall into the following broad categories:
- 🔵 Economic
- 🟢 Environmental
- 🟠 Geopolitical
- 🔴 Societal
- 🟣 Technological
It goes without saying that infectious diseases have now become one of the top societal risks on both metrics of likelihood and impact.
That said, environmental risks continue to dominate the leaderboard, accounting for five of the top 10 risks by impact, especially when it comes to climate action failure.
Several countries are off-track in meeting emissions goals set by the Paris Climate Agreement in 2015, while the pandemic has also delayed progress in the shift towards a carbon-neutral economy. Meanwhile, biodiversity loss is occurring at unprecedented rates.
|Rank||Top Risks by Likelihood||Top Risks by Impact|
|#1||🟢Extreme weather||🔴Infectious diseases|
|#2||🟢Climate action failure||🟢Climate action failure|
|#3||🟢Human environmental damage||🟠Weapons of mass destruction|
|#4||🔴Infectious diseases||🟢Biodiversity loss|
|#5||🟢Biodiversity loss||🟢Natural resource crises|
|#6||🟣Digital power concentration||🟢Human environmental damage|
|#7||🟣Digital inequality||🔴Livelihood crises|
|#8||🟠Interstate relations fracture||🟢Extreme weather|
|#9||🟣Cybersecurity failure||🔵Debt crises|
|#10||🔴Livelihood crises||🟣IT Infrastructure breakdown|
As for other risks, the prospect of weapons of mass destruction ranks in third place for potential impact. In the global arms race, a single misstep would trigger severe consequences on civil and political stability.
New Risks in 2021
While many of the risks included in the Global Risks Report 2021 are familiar to those who have read the editions of years past, there are a flurry of new entries to the list this year.
Here are some of the most interesting ones in the risk assessment, sorted by category:
COVID-19 has resulted in a myriad of knock-on societal risks, from youth disillusionment and mental health deterioration to livelihood crises. The first two risks in particular go hand-in-hand, as “pandemials” (youth aged 15-24) are staring down a turbulent future. This generation is more likely to report high distress from disrupted educational and economic prospects.
At the same time, as countries prepare for widespread immunization against COVID-19, another related societal risk is the backlash against science. The WEF identifies vaccines and immunization as subjects susceptible to disinformation and denial of scientific evidence.
As monetary stimulus was kicked into high gear to prop up markets and support many closed businesses and quarantined families, the economic outlook seems more fragile than ever. Debt-to-GDP ratios continue to rise across advanced economies—if GDP growth stagnates for too long, a potential debt crisis could see many businesses and major nations default on their debt.
With greater stress accumulating on a range of major industries such as travel and hospitality, the economy risks a build-up of “zombie” firms that drag down overall productivity. Despite this, market valuations and asset prices continue to rise, with equity markets rewarding investors betting on a swift recovery so far.
Last but not least, COVID-19 has raised the alert on various technological risks. Despite the accelerated shift towards remote work and digitalization of entire industries, the reality is that digital inequality leaves those with lower digital literacy behind—worsening existing inequalities.
Big Tech is also bloating even further, growing its digital power concentration. The market share some companies hold in their respective sectors, such as Amazon in online retail, threatens to erode the agency of other players.
Assessing the Top 10 Risks On the Horizon
Back in mid-2020, the WEF attempted to quantify the biggest risks over an 18-month period, with a prolonged economic recession emerging on top.
In this report’s risk assessment, global risks are further classified by how soon their resulting threats are expected to occur. Weapons of mass destruction remain the top risk, though on a much longer scale of up to 10 years in the future.
|#1||🟠Weapons of mass destruction||62.7||Long-term (5-10 years)|
|#2||🔴Infectious diseases||58||Short-term risks (0-2 years)|
|#3||🔴Livelihood crises||55.1||Short-term risks (0-2 years)|
|#4||🔵Asset bubble burst||53.3||Medium-term risks (3-5 years)|
|#5||🟣 IT infrastructure breakdown||53.3||Medium-term risks (3-5 years)|
|#6||🔵Price instability||52.9||Medium-term risks (3-5 years)|
|#7||🟢Extreme weather events||52.7||Short-term risks (0-2 years)|
|#8||🔵Commodity shocks||52.7||Medium-term risks (3-5 years)|
|#9||🔵Debt crises||52.3||Medium-term risks (3-5 years)|
|#10||🟠State collapse||51.8||Long-term (5-10 years)|
Through this perspective, COVID-19 (and its variants) remains high in the next two years as the world scrambles to return to normal.
It’s also clear that more economic risks are taking center stage, from an asset bubble burst to price instability that could have a profound effect over the next five years.
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Visualizing the Impact of Rising Sea Levels, by Country
Here’s a look at how people around the world could be impacted by coastal flooding by 2100, based on rising sea level projections.
Climate change is already causing sea levels to rise across the globe. In the 20th century alone, it’s estimated that the mean global sea level rose by 11-16 cm.
How much will sea levels change in the coming years, and how will it affect our population?
In the below series of visualizations by Florent Lavergne, we can see how rising sea levels could impact countries in terms of flood risk by the year 2100.
These graphics use data from a 2019 study by Scott Kulp and Benjamin Strauss. Their study used CoastalDEM—a 3D graphics tool used to measure a population’s potential exposure to extreme coastal water levels—and examined rising sea levels under different levels of greenhouse gas (GHG) emissions.
Flood Risk By Region
Which countries will be most severely affected by rising sea levels?
If things continue as they are, roughly 360 million people around the world could be at risk of annual flood events by 2100. Here’s what those figures look like across each region:
On the continent of Africa, one of the countries with the highest number of people at risk of coastal flooding is Egypt.
Over 95% of Egypt’s population lives along the Nile river, with some areas situated at extremely low elevations. The country’s lowest point is 133 m below sea level.
Asia’s population will be more heavily impacted by flooding than any other region included in the dataset.
According to the projections, 70% of the people that will be affected by rising sea levels are located in just eight Asian countries: China, Bangladesh, India, Vietnam, Indonesia, Thailand, the Philippines, and Japan.
One of the most high-risk populations in Europe is the Netherlands. The country has a population of about 17 million, and as of 2019, about half of its population lives in areas below sea level.
The country’s lowest point, the town Nieuwekerk aan den Ijssel, is 6.8 m below sea level.
In North America, the U.S., Canada, and Mexico are expected to see the highest numbers of impacted people, due to the size of their populations.
But as a percentage of population, other countries in Central America and the Caribbean are more greatly at risk, especially in high emission scenarios. One country worth highlighting is the Bahamas. Even based on moderate emission levels, the country is expected to see a significant surge in the number of people at risk of flood.
According to the World Bank, this is because land in the Bahamas is relatively flat, making the island especially vulnerable to sea level rises and flooding.
As South America’s largest country by population and with large coastal cities, Brazil‘s population is the most at risk for flood caused by rising sea levels.
Notably, thanks to a lot of mountainous terrain and municipalities situated on high elevation, no country in South America faces a flood risk impacting more than 1 million people.
By 2100, Polynesian countries like Tonga are projected to see massive increases in the number of people at risk of flooding, even at moderate GHG emissions.
According to Reuters, sea levels in Tonga have been rising by 6 mm each year, which is nearly double the average global rate. The reason for this is because the islands sit in warmer waters, where sea level changes are more noticeable than at the poles.
What’s Causing Sea Levels to Rise?
Since 1975, average temperatures around the world have risen 0.15 to 0.20°C each decade, according to research by NASA.
This global heating has caused polar ice caps to begin melting—in just over two decades, we’ve lost roughly 28 trillion tonnes of our world’s ice. Over that same timeframe, global sea levels have risen by an average of 36 mm. These rising sea levels pose a number of risks, including soil contamination, loss of habitat, and flooding.
As countries are affected by climate change in different ways, and at different levels, the question becomes how they will respond in turn.
What Are the Five Major Types of Renewable Energy?
Renewable energy is the foundation of the ongoing energy transition. What are the key types of renewable energy, and how do they work?
The Renewable Energy Age
Awareness around climate change is shaping the future of the global economy in several ways.
Governments are planning how to reduce emissions, investors are scrutinizing companies’ environmental performance, and consumers are becoming conscious of their carbon footprints. But no matter the stakeholder, energy generation and consumption from fossil fuels is one of the biggest contributors to emissions.
Therefore, renewable energy sources have never been more top-of-mind than they are today.
The Five Types of Renewable Energy
Renewable energy technologies harness the power of the sun, wind, and heat from the Earth’s core, and then transforms it into usable forms of energy like heat, electricity, and fuel.
|Energy Source||% of 2021 Global Electricity Generation||Avg. levelized cost of energy per MWh|
Editor’s note: We have excluded nuclear from the mix here, because although it is often defined as a sustainable energy source, it is not technically renewable (i.e. there are finite amounts of uranium).
Though often out of the limelight, hydro is the largest renewable electricity source, followed by wind and then solar.
Together, the five main sources combined for roughly 28% of global electricity generation in 2021, with wind and solar collectively breaking the 10% share barrier for the first time.
The levelized cost of energy (LCOE) measures the lifetime costs of a new utility-scale plant divided by total electricity generation. The LCOE of solar and wind is almost one-fifth that of coal ($167/MWh), meaning that new solar and wind plants are now much cheaper to build and operate than new coal plants over a longer time horizon.
With this in mind, here’s a closer look at the five types of renewable energy and how they work.
Wind turbines use large rotor blades, mounted at tall heights on both land and sea, to capture the kinetic energy created by wind.
When wind flows across the blade, the air pressure on one side of the blade decreases, pulling it down with a force described as the lift. The difference in air pressure across the two sides causes the blades to rotate, spinning the rotor.
The rotor is connected to a turbine generator, which spins to convert the wind’s kinetic energy into electricity.
2. Solar (Photovoltaic)
Solar technologies capture light or electromagnetic radiation from the sun and convert it into electricity.
Photovoltaic (PV) solar cells contain a semiconductor wafer, positive on one side and negative on the other, forming an electric field. When light hits the cell, the semiconductor absorbs the sunlight and transfers the energy in the form of electrons. These electrons are captured by the electric field in the form of an electric current.
A solar system’s ability to generate electricity depends on the semiconductor material, along with environmental conditions like heat, dirt, and shade.
Geothermal energy originates straight from the Earth’s core—heat from the core boils underground reservoirs of water, known as geothermal resources.
Geothermal plants typically use wells to pump hot water from geothermal resources and convert it into steam for a turbine generator. The extracted water and steam can then be reinjected, making it a renewable energy source.
Similar to wind turbines, hydropower plants channel the kinetic energy from flowing water into electricity by using a turbine generator.
Hydro plants are typically situated near bodies of water and use diversion structures like dams to change the flow of water. Power generation depends on the volume and change in elevation or head of the flowing water.
Greater water volumes and higher heads produce more energy and electricity, and vice versa.
Humans have likely used energy from biomass or bioenergy for heat ever since our ancestors learned how to build fires.
Biomass—organic material like wood, dry leaves, and agricultural waste—is typically burned but considered renewable because it can be regrown or replenished. Burning biomass in a boiler produces high-pressure steam, which rotates a turbine generator to produce electricity.
Biomass is also converted into liquid or gaseous fuels for transportation. However, emissions from biomass vary with the material combusted and are often higher than other clean sources.
When Will Renewable Energy Take Over?
Despite the recent growth of renewables, fossil fuels still dominate the global energy mix.
Most countries are in the early stages of the energy transition, and only a handful get significant portions of their electricity from clean sources. However, the ongoing decade might see even more growth than recent record-breaking years.
The IEA forecasts that, by 2026, global renewable electricity capacity is set to grow by 60% from 2020 levels to over 4,800 gigawatts—equal to the current power output of fossil fuels and nuclear combined. So, regardless of when renewables will take over, it’s clear that the global energy economy will continue changing.
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